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Construction Sector.

Dáil Éireann Debate, Tuesday - 16 November 2004

Tuesday, 16 November 2004

Questions (85)

Fergus O'Dowd

Question:

130 Mr. O’Dowd asked the Minister for Enterprise, Trade and Employment the likely impact on employment of a slowdown in the housing market; and if he will make a statement on the matter. [28355/04]

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Written answers

Employment in the construction sector, which includes the house-building sector, increased by 7.6%, or 14,600, in the 12-month period to end May 2004. In the period 1997-2003, employment in the sector increased by approximately 65%. A number of reports have been produced commenting on the future of the construction sector. The Department of the Environment, Heritage and Local Government, which has primary responsibility for the formulation and implementation of policy on housing, commissioned an independent review of the construction industry for 2003 and outlook report for 2004-06. This was published in September 2004 and states that the upturn in construction employment reflects the continued strength in house building. It also states that the return to confidence in other sectors will at least help to maintain construction employment at current levels for the remainder of the year.

In 2003, the expert group on future skills needs produced a skills monitoring report on the construction industry for the period 2003-2010. The report predicted that both output and employment is likely to decline over the period 2004-2010. It stated also that the construction industry is operating at peak activity as evidenced by the unprecedented growth in housing supply in 2003 at a level 19% ahead of 2002 levels. The forecast assumes further increases in 2004 and 2005 when annual house completions will be approximately 60,000. Thereafter, it is assumed that while private house building will gradually decline, the average for the period 2003-10 will nevertheless remain at above 53,000 annually. The expert group believes the impact of its predicted modest decline in employment in the house building sector will be softened by a growth in repair and maintenance for the latter half of the decade.

The employment trend in the overall economy continues to be upward, with a national employment growth rate of 2.4% in the year, reflecting an improvement in economic conditions. Experience shows that while job losses are being encountered in some sectors they are being more than offset by employment opportunities in other sectors. The forecast for employment growth is estimated to be around 1% for this year. The current unemployment rate is 4.4%, which is relatively low, particularly when compared to the EU-25 average of around 9%. The ESRI predicts that it will remain at this level in the short to medium term.

Question No. 131 answered with QuestionNo. 115.
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